2015
Reductions in pension allowances
David Flowers / 0 Comments /
The amount that high earners can contribute to their pensions and claim tax relief is reducing from April 2016. For every £2 you earn over £150,000, your annual pension allowance will reduce by £1. This reduction continues until your allowance is reduced to £10,000 which means earnings of £210,000 and above. Here’s the reduced pension allowance depending upon your annual income.
| Income | Annual pension allowance |
| < £150,000 | £40,000 |
| £180,000 | £25,000 |
| > £210,000 | £10,000 |
The Lifetime Allowance is also reducing. This is the amount that you are allowed to accrue in pension funds or pension value before you start to suffer additional tax charges. The amount is reducing from £1,250,000 to £1,000,000 in April 2016. If this affects you, in other words if your pension fund is hovering around £1,000,000, you should consider “Fixed Protection 2016”. Please do talk to us if we haven’t already brought it up with you!
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